What is Happening

With mounting expectation that the Supreme Court will strike down tariffs imposed under the International Emergency Economic Powers Act (IEEPA), importers are confronting “file or die” fears—specifically, the concern that they could lose refunds for duties already paid unless they immediately initiate litigation in the Court of International Trade (CIT).

While this concern is understandable given the structural features of customs litigation, the context of the current IEEPA tariff litigation is fundamentally different in ways that substantially reduce this risk. As detailed below, recent CIT decisions and the anticipated timing of a Supreme Court ruling suggest that importers seeking IEEPA refunds are not locked into immediate litigation, though litigation may still serve as a prudent “insurance policy” against residual procedural risk.

The “Jurisdictional Trap” in Tariff Disputes

At the core of importer concern is a mismatch between administrative timing and judicial jurisdiction that often plagues standard tariff disputes:

• Liquidation Timing: Liquidation (the finalizing of the duty calculation and payment) typically occurs 314 days (approximately 10 to 11 months) after entry. Once liquidated, importers have 180 days to file a protest.

• The Trap: If a protest window closes before the legality of a tariff is resolved, an importer may be left without a means to recover duties. Judicial review of tariff disputes lies in the CIT under 28 U.S.C. § 1581. Section 1581(a) is the primary jurisdictional route and permits review of denied protests where U.S. Customs and Border Protection (CBP) has exercised judgment or discretion. The potential trap arises from the interaction between this review and the CIT’s residual jurisdiction. Courts have consistently held that § 1581(a) does not permit challenges to the legality of a tariff itself when CBP’s role is ministerial—i.e., where CBP is simply applying a tariff mandated by statute or presidential action and lacks authority to invalidate it. However, the CIT’s residual jurisdiction (§ 1581(i)) is available when, and only if, the protest jurisdiction (§ 1581(a)) is unavailable.
• The Consequence: Importers have historically faced a trap where § 1581(a) is deemed “technically” available (because a protest could be filed), foreclosing access to § 1581(i)—even if the protest process itself cannot address the underlying legality of the tariff.

As a result, importers seeking refunds for tariffs they believe are illegal, but not yet definitively adjudicated, may risk losing access to any judicial forum if they rely solely on the administrative process. If the protest window closes before the legality question is resolved, an importer could be left without a means to recover duties, even if the tariff is later declared unlawful.

Why the IEEPA Context Is Different

The current IEEPA litigation landscape mitigates this “jurisdictional trap” in two critical ways:

• Anticipated Supreme Court Timing: The Supreme Court is expected to resolve the legality of the tariffs before most entries liquidate and before protest windows close. A decision is expected in the coming weeks. If the Supreme Court invalidates the tariffs before entries are liquidated, importers can likely use Post-Summary Corrections (PSCs) to recover those duties without litigation.
• The AGS Decision: The risk is further reduced by the CIT’s recent decision in AGS Company Automotive Solutions, et al. v. CBP, et al. (Slip Op. 25-154). In AGS, the court held that:
  • Residual Jurisdiction Exists: 1581(i) provides a viable avenue for judicial review of challenges to the legality of IEEPA tariffs where § 1581(a) is unavailable.
  • Ministerial Actions: Even if CBP’s denial of a protest of the IEEPA tariffs is treated as ministerial, importers may still pursue relief under residual jurisdiction.

Strategic Considerations for Importers

While the “file or die” pressure is lower than in typical cases, a narrow residual risk remains. Courts could still theoretically conclude that § 1581(a) availability precludes § 1581(i) jurisdiction in specific fact patterns. Although unlikely—because it would allow procedural rules to undermine a Supreme Court decision—the risk cannot be entirely eliminated. Therefore, the decision to litigate should be treated as a risk-management calculation:

• Low Exposure (The Administrative Path): For importers with limited exposure to liquidated IEEPA tariffs, relying solely on the administrative process (PSCs and protests) likely provides a more cost-effective path to recovery than litigation in light of the expected timing of the Supreme Court’s decision.
• High Exposure (The “Insurance Policy” Approach): For importers with substantial liquidated exposure, § 1581(i) litigation acts as a comprehensive insurance policy against low-probability, high-impact outcomes while offering other practical procedural advantages.
  • Judicial Path to Recovery: Court-ordered reliquidation may provide a more direct and more certain path to refunds. In AGS, the CIT held that the government is judicially estopped from invoking procedural finality to block reliquidation, given its commitment to honor the Supreme Court’s legality determination. Filing suit therefore preserves the importer’s right to pursue recovery even if the 180-day protest window expires while the litigation is pending.
  • Stay of Proceedings: The CIT’s Administrative Order 25-02 automatically stays all new IEEPA refund cases, allowing importers to file now and “wait and see” without incurring active discovery costs.
  • Efficiency: Litigation can also be efficient when multiple unliquidated entries are involved, since PSCs cannot be filed in bulk; a single judicial action can address numerous entries at once and reduce administrative burden.

How We Can Help

Hunton Andrews Kurth is prepared to assist clients under either approach to ascertain the most viable recovery path.

• Administrative Strategy: We can support a purely administrative strategy designed to maximize recovery through PSCs and protests once the Supreme Court resolves the legality question.
• Litigation Strategy: For clients with significant exposure, we are prepared to pursue § 1581(i) litigation in the CIT as a protective measure to preserve recovery rights for all affected entries—regardless of their liquidation status or protest window expiration—including filing complaints and seeking court-ordered reliquidation and refunds.
• Compliance and Mitigation: If the Supreme Court ultimately declines to vacate the IEEPA tariffs—or if they are quickly replaced—we can help clients develop compliance-based tariff mitigation strategies to manage ongoing exposure.